Why Does Everyone Keep Lying About The Gender Wage Gap?

Earlier this month, Betsey Stevenson, a member of the Council of Economic Advisers, and Obama Administration economic adviser made the following statement regarding pay disparity between men and women.

“They’re stuck at 77 cents on the dollar, and that gender wage gap is seen very persistently across the income distribution, within occupations, across occupations, and we see it when men and women are working side by side doing identical work.”

It caused a bit of a dust up and Stevenson was forced to retract the statement for the simple reason that women do not make 77 cents on the dollar compared to men “working side by side doing identical work.” Stevenson said that she misspoke and, truly, she may have but I’ve seen this number used over and over to address wage discrimination against women, primarily on web sites that purport to support women and women’s issues. Jezebel has drilled this 77 cents figure into their writing repeatedly as have Progressive websites. So, I want to unpack this 77 cent figure for the benefit of those who don’t have the time to or don’t know that it would be helpful in understanding exactly where women are in today’s economy.

Where Does The 77 Cent Figure Come From?

It’s a compilation of data included in the 2012 U.S. Census. It includes all men and women working 32 hours or more a week, 32 hours is considered full time. It includes all professions from the lowest paying to the highest and makes no distinctions for experience, years consistently worked with a particular company, age, or education. On first glance this seems completely unfair. Why should women be paid less than men? Quite right, but what is not commonly understood on the internet and what various advocacy organizations sometimes seem to want to hide is that this is a statistically raw number. The problem with raw numbers like it is that it’s nearly useless for helping to answer the actual question of equality in pay.

An extreme hypothetical, what if every woman in the US was an engineer and every man was a social worker? Raw data pulled from a Census study would reveal that women made LOTS more money than men. On its face it would appear that there was a severe pay gap between men and women. However, that wouldn’t take into account the different skill sets of the two professions. It wouldn’t take the education required into account. It would be comparing apples and oranges while claiming both were ‘just fruits.’ Hardly accurate or helpful. However, there is a pay gap between men and women. So, what is it?

The Pay Gap, It’s Barely Real

Back in February of this year President Obama made the following statement as he pushed for legislation to address disparate wages between women and men.

Today,” he said, “women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.”

You see that he’s using the raw census data number here which means he’s making no distinction between a 21 year old barista and a 50 year old Microsoft executive. He then goes on to say that the difference between those two is “wrong.” It certainly is wrong in that it’s meaningless. It absolutely doesn’t help anyone understand anything about wages and gender. In order to understand what those numbers mean you have to break it down into categories so you can compare like with like. Additionally, it helps to know what jobs men and women are actually working in.

The Daily Beast did a good job of explaining how the vast majority of the 77 cent pay gap comes from the different professional choices that men and women make by putting together a list of the most lucrative and least lucrative professions and applying gender percentages to them. Here they are.

The Most Money

1.   Petroleum Engineering: 87% male
2.   Pharmacy Pharmaceutical Sciences and Administration: 48% male
3.   Mathematics and Computer Science: 67% male
4.   Aerospace Engineering: 88% male
5.   Chemical Engineering: 72% male
6.   Electrical Engineering: 89% male
7.   Naval Architecture and Marine Engineering: 97% male
8.   Mechanical Engineering: 90% male
9.   Metallurgical Engineering: 83% male
10. Mining and Mineral Engineering: 90% male

The Least Money

1.  Counseling Psychology: 74% female
2.  Early Childhood Education: 97% female
3.  Theology and Religious Vocations: 34% female
4.  Human Services and Community Organization: 81% female
5.  Social Work: 88% female
6.  Drama and Theater Arts: 60% female
7.   Studio Arts: 66% female
8.   Communication Disorders Sciences and Services: 94% female
9.   Visual and Performing Arts: 77% female
10. Health and Medical Preparatory Programs: 55% female

This information absolutely echoes the difference between men and women entering STEM majors in U.S. colleges. Either for reasons of societal pressure or inherent differences in interest, most women gravitate towards more people oriented and creative fields. Note, I’m not saying this should be the case and I’m not stating why it’s the case. I’m just saying that it is the case.

Looking at men and women working in the same STEM fields post graduation gives a much, much clearer picture of where women stand in relation to men.

That’s better, and you can see from the above that the 77 cent, which reflects a 23% pay gap, drops dramatically. However, the above chart doesn’t take into account experience or time worked both of which are required for high wages. What it does provide, however, is a raw data set that is field specific. We’re comparing engineer to engineer here, not barista to executive. So, where can we get some good normalized information that will take into account experience and time worked? Well, let’s ask some academic feminists. Specifically, let’s ask the American Association of University Women (AAUW). In 2012, the AAUW conducted an extensive study into the gender wage gap entitled ‘Graduating to a Pay Gap’ that revealed the wage gap, in an apples to apples comparison, is almost nonexistent.

The AAUW has now joined ranks with serious economists who find that when you control for relevant differences between men and women (occupations, college majors, length of time in workplace) the wage gap narrows to the point of vanishing. The 23-cent gap is simply the average difference between the earnings of men and women employed “full time.” What is important is the “adjusted” wage gap-the figure that controls for all the relevant variables. That is what the new AAUW study explores.

The AAUW researchers looked at male and female college graduates one year after graduation. After controlling for several relevant factors (though some were left out, as we shall see), they found that the wage gap narrowed to only 6.6 cents. How much of that is attributable to discrimination? As AAUW spokesperson Lisa Maatz candidly said in an NPR interview, “We are still trying to figure that out.”

That means that women, contrary to what is often reported, are making 93.4 cents on the dollar as compared to men, not the far lower 77 cents. Backing up the AAUW study, the Department of Labor revealed a similar study in 2009 that indicated that the wage gap is between 4.8 and 7 cents on the dollar. Now, clearly, that gap is of concern but it’s not the 23% reduction in pay that many vested interests want women to believe is the price of being a woman in the workplace.

Bad Information Equals Terrible Advocacy

The 77 cent figure is false and it’s been known to be false for years and yet the number is still bandied around in an effort to let women know that their plight is dire in the workplace. It is used as proof of systemic discrimination despite it directly comparing the salaries of people who do drastically different work. Why is this the case? Why are multi-million dollar non-profits using this figure to lie to you? Why are the President’s own economic advisers being vague on the facts and forced to retract inaccurate statements? Why are reams of blogs written extolling the 77 cent injustice to the world?

Certainly, it could be simple salesmanship. If a person thinks a problem is dire then they’re going to direct their attention to that problem. People won’t give money to causes unless they actually believe that money will solve something.

In the President’s case, it’s an attempt to solidify the female vote both for himself and the Democratic Party. If the President were to come out and say “multiple studies reveal that it’s not nearly as big a problem as we thought” then there would be mass rebellion. There’s a price to be paid for any organization that has repeatedly misled it’s constituency or members for years when that falsehood finally comes to light. No organization wants to pay that price. Disproving a commonly and dearly held narrative is one of the most dangerous things you can do. Don’t believe me? Ask Galileo.

However, barring the greed of large organizations, which is both ubiquitous and timeless, the people this misinformation really hurts are women. How are women and female advocacy organizations going to drill down on that 4.8-7 cent wage gap when they’re operating under the mistake impression that the problem is three times or more larger than it actually is? Changes can’t be made in such an environment because problems aren’t being properly assessed and the victims, still, are the women with good and fair hearts who want equality and believe that they are so, so far away from getting it.

To quote the President, “That is wrong, and in 2014, it’s an embarrassment.”